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Int. J. Manufacturing Technology and Management, Vol. 32, No. 3, 2018
Recycling waste and upcycling people: a new type of
environmentally-motivated social enterprise strategy
Irena Descubes* and Tom McNamara
ESC Rennes School of Business,
2 rue Robert d’Arbrissel, 35000 Rennes, France
Email: irena.descubes@esc-rennes.com
Email: tom.mcnamara@esc-rennes.com
*Corresponding author
Tony Cragg
Ecole Supérieure de Logistique Industrielle,
26 quai Surcouf, 35600 Redon, France
Email: tcragg.esli@campus-redon-industries.com
Abstract: With the use of a case study methodology, the socially responsible
enterprise La Feuille d’Erable, based in north-west France, was analysed based
upon the framework proposed by Boons and Lüdeke-Freund (2013). Within an
overarching green management philosophy, this firm incorporates a program
for the integration of socially and economically excluded people into a
recycling and upcycling business activity. Our findings suggest that success for
social enterprises, that combine the dual aims of green production and inclusion
of hitherto disadvantaged groups, under the banner of corporate social
responsibility, is linked to several clearly identified factors. The previously
proposed typology (Vickers and Lyon, 2014) of environmentally-motivated
social enterprises’ strategies is amended. Guidelines and insights are offered to
managers who may wish to implement socially responsible human resource
management (SRHRM) techniques in their own organisations.
Keywords: socially responsible human resource management; SRHRM; green
social economy; GSE; social enterprises; waste recycling; social inclusion.
Reference to this paper should be made as follows: Descubes, I.,
McNamara, T. and Cragg, T. (2018) ‘Recycling waste and upcycling people:
a new type of environmentally-motivated social enterprise strategy’, Int. J.
Manufacturing Technology and Management, Vol. 32, No. 3, pp.270–296.
Biographical notes: Irena Descubes is an Assistant Professor of Marketing and
Manager of the Executive MBA at the Rennes School of Business. Her
research is driven by her interest in societal change, sustainable marketing
innovation and responsible managerial practices. She holds a PhD from the
University of Economics in Prague, Czech Republic. Her work has been
published in the Journal of Business Strategy, Strategic Change and Journal of
Organizational Change Management.
Tom McNamara is an Assistant Professor of Operations Management at the
Rennes School of Business, France and Manager of the MSc in the Supply
Chain Management. He is also a former Visiting Lecturer at the French
Copyright © 2018 Inderscience Enterprises Ltd.
Recycling waste and upcycling people
271
National Military Academy at the Saint-Cyr, Coëtquidan, France. Previous to
academia, he worked at a Fortune 500© energy company. His current research
interests include issues and trends in production and strategic management.
Tony Cragg obtained his PhD from the University of Westminster in 2016 for
his research into small firms and global supply chains in the agricultural
machinery sector. He teaches at a specialist school in the industrial logistics
and is currently researching the management of change and the automation of
processes in regional distribution centres.
1
Introduction
A steady increase in world population, combined with the voracious appetite of emerging
economies for ever more resources to fuel their growth, has put tremendous stress on
already fragile ecosystems (De Burgos and Cespedes, 2001; Esty and Winston, 2009;
Kleindorfer et al., 2005). As concern about the health and safety of the planet grows,
production managers are increasingly becoming cognisant of the fact that they need to
take into account how their operations impact the environment around them. Pressure to
do so is coming from no less an organisation than the United Nations (UN). In its ‘2030
agenda for sustainable development (SD)’ (UN Resolution 70/1, 2015), the UN clearly
states the need to “ensure the lasting protection of the planet and its natural resources”
and that member states “resolve also to create conditions for sustainable, inclusive and
sustained economic growth” [UN Resolution 70/1, (2015), p.3]. The European Union, for
its part, says that it is fully committed to implementing the ‘2030 agenda’ and that all of
the document’s sustainable development goals (SDGs) will be incorporated into future
EU policies (European Commission, 2016).
While many governments and international agencies are actively promoting green and
sustainable initiatives, it has also been observed that markets attribute a distinct premium
to companies that are considered as being green (Brandt, 2007; Saha and Darnton, 2005;
Yang et al., 2010). But markets are not perfect. This continued (if not to say renewed)
emphasis on concern for the environment has forced many businesses to look at not only
the financial aspects of their operations, but the social and ecological ones as well
(Bevilacqua et al., 2007; Bullinger et al., 1999; Le Pochat et al., 2007; Lee and Klassen,
2008).
A key component in the achievement of the goals set by the UN 2030 agenda for SD
will most surely be the concept of ‘green production’ (GP), an expression commonly
used interchangeably with the term ‘green manufacturing’ (GM). While there is no exact
definition, GP would generally be considered as a manufacturing principle that places
respect for the environment and conservation of resources at the centre of all activities
which result in the production of a good or service (Zhou et al., 2012). It is seen as
having the potential to solve or mitigate many of the challenges currently facing the
planet (Rehman and Shrivastava, 2013).
While any activity that results in the use of less energy and the production of less
waste should be applauded, it should be noted that the majority of GP initiatives would be
characterised as expensive, risky and technologically challenging, with a relatively slow
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rate of return on initial investment (Bititci et al., 2012; Montalvo, 2008; Noci and
Verganti, 1999).
While competition obliges firms to innovate and provide customers with goods and
services at affordable prices, the market, in itself, does not produce equality of incomes
and may produce negative environmental externalities, such as pollution and climate
change. Inequality can be dysfunctional, as it disrupts social ties and leads to insecurity, a
lack of autonomy and social exclusion (Wilkinson and Pickett, 2009). Equally, citizens
are increasingly seeking protection from the environmental damage caused by polluting
firms, as well as taking legal actions (Tirole, 2016). When the state and state-funded
agencies fail to address the problems that arise as a result of the gap between the ‘haves’
and the ‘have-nots’ created in market economies, as well as any related environmental
concerns, it is usually left to charities as a last resort to alleviate hardships caused by the
rigours of the market (Bywaters, 2012).
While a logical first step to becoming a model corporate citizen would be to lessen
the environmental impact of ones operations, the importance of green human resources
management (GHRM) is increasingly being recognised and understood (Jabbour et al.,
2010; Jackson et al., 2014; Renwick et al., 2013). Guerci et al. (2015) define GHRM as a
“set of management processes that companies implement for responding to stakeholder
pressures on environmental issues”. And while there is evidence supporting the argument
that a positive correlation exists between GHRM and improvements in a firm’s
performance in terms of respect for the environment (Renwick et al., 2013), there is still
some ambiguity as to how GHRM principles can best be employed to achieve green
outcomes (Jackson et al., 2011; Jackson and Seo, 2010; Renwick et al., 2013). The
primary challenge associated with the implementation of GHRM is the prerequisite that
companies need to be knowledgeable and proficient in human resources management,
environmental management and operations management (Jabbour and Jabbour, 2016).
No small feat.
However, in recent decades another form of organisation that implements innovative
HRM practices has developed rapidly, namely the social enterprise. On a spectrum
ranging from traditional charities, where the primary objective is social value, to
traditional commercial businesses, where the primary objective is financial value, social
enterprises occupy a space somewhere between these two (Bolton et al., 2007; Bridge
et al., 2009; Chell, 2007). It can be argued that social enterprises focus on civic initiatives
that pursue social and environmental goals with an entrepreneurial spirit. They engage in
the delivery of social and work integration services for disadvantaged groups and
communities. They are distinct from non-profit organisations, because they are directly
engaged in the production and/or sale of goods and services. Distinct from commercial
businesses, social enterprises tend to have higher levels of participation in management,
with goals that would include quantifiable benefits to the community. Hence it can be
said that for social enterprises: “economic drivers are means to a social end, not the end
in itself” [Granados et al., (2011), p.199].
Research has shown a rapid worldwide growth in this sector (Kerlin, 2009) and that
social enterprises appear to be increasingly successful (Chiapello, 2015). For example, in
the UK, as compared to traditional SMEs, social enterprises saw a greater increase in
their turnover over a 12 month period, higher rates of development of new products or
services, greater presence in deprived communities, as well as high rates of employment
of ex-offenders, people with disabilities and the long-term unemployed. Additionally,
social enterprises are a diverse sector: they are more likely to be led by women; more
Recycling waste and upcycling people
273
likely to be managed by younger leaders and more likely to be led by someone from a
minority ethnic background than a contemporary business (Villeneuve-Smith and
Temple, 2015).
Within the social enterprise sector, one subset is green social enterprises (Lucas et al.,
2003; Smith and Young, 2007). These companies combine social priorities with an
overarching green agenda which permeates the different organisational functions:
production processes, management, HRM, office based services, inter-firm relations, etc.
Given the relatively recent emergence of this new phenomenon and their importance in
the social economy (Murray, 2009), from an academic research perspective, it is pertinent
to ask two key questions: firstly what indicators can be used to measure success in a
green social enterprise, given that the conventional business indicators of sales, profit and
market share are insufficient and secondly what are the factors that lead to success on
these terms? An investigation along these parameters would be an extension of the
increasing research being done that tries to identify and quantify the concerns and key
success factors associated with developing a business model that is both commercially
viable and environmentally sustainable (Bocken et al., 2013, 2014; Boons and
Lüdeke-Freund, 2013; Carraher et al., 2008; Parnell, 2008; Schaltegger et al., 2012, 2016;
Rauter et al., 2015; Stead and Stead, 2000, 2004, 2008; Wells, 2013).
Vickers and Lyon (2014) propose a typology of three distinct growth strategies for
environmentally-motivated social enterprises (further ESE). These are:
1
‘small and beautiful’ (restricted to niche/premium market services)
2
‘green knowledge economy’ (reliant on niche markets driven by regulation and
sustainability policies of public sector)
3
‘green collar army’ (dependent on public quasi-markets and subordinate to corporate
prime contractors).
The purpose of this paper is to put forth the proposition that there exists another type of
ESE with a distinct set of socially responsible human resource management (SRHRM)
key performance indicators and to analyse the underlying governance model that is based
on an enhanced, systemic and differentiated managerial approach. Some of the existing
literature on sustainable business model archetypes (Bocken et al., 2014) and social
enterprise growth strategies (Vickers and Lyon, 2014) has neglected the importance of
SRHRM as part of a sustainability agenda. This paper, by focusing on a particular case
study, aims to redress the balance through an application of the four elements of a
sustainable business model (Boons and Lüdeke-Freund, 2013): the value proposition, the
supply chain, the customer interface and the financial model. While Lovins and Hawken
(1999) touch upon the importance of investing in human capital in their concept of
‘natural capitalism’, the originality of this case study is that the firm’s value proposition
emphasises the empowerment of socially disadvantaged employees and human resource
management practices that are innovative and progressive. As a result, the case study
presents a model of a firm that encompasses both social and environmental priorities in a
holistic format.
The present authors carried out a case study research initiative into a green socially
responsible recycling firm, La Feuille d’Erable (FE), in Rennes, north-west France. This
firm specialises in the collection and recycling of waste from businesses, communities
and government agencies. It has developed an innovative program for the employment of
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socially excluded people and has implemented a green management philosophy. It has
become increasingly autonomous, by progressively reducing dependence on state and
regional subsidy.
In the first part of this article, we will review the literature relevant to GHRM and
green social enterprises, along with associated key success factors. Then we will discuss
the case study methodology used. Next, we will present the case study of FE and analyse
how this firm has achieved success in terms of sustainability. In the following part a
modified typology model of ESEs will be proposed. The newly identified ESE type will
be explained, with the relevant factors used to measure success being outlined. Lastly, we
discuss our findings and present conclusions.
2
Literature review
The term ‘green’ is often used to denote a state of awareness and concern for the
environment. When used in conjunction with production or manufacturing, it is
considered to be referring to a process that takes into consideration, through effective
management and control, its impact on the use of resources and the environment (Deif,
2011). However, as the desire for companies to become more responsible increases, the
term green is being applied to other disciplines (Alfred and Adam, 2009), such as
operations management (Govindan et al., 2014; Gunasekaran and Ngai, 2012;
Gunasekaran and Spalanzani, 2012; Sarkis, 2001), and, interestingly enough, human
resources management (HRM) (Jackson et al., 2011; Renwick et al., 2008, 2013).
2.1 Defining GHRM
Starting with the UN Conference on Environment and Development in Rio de Janeiro in
1992, followed by the introduction of ISO14001 (the international standard for
environmental management systems), the 1990s saw an increase in the amount of
research into the greening of organisations (Biehler-Baudisch, 1994; Hale, 1995;
Wehrmeyer, 1996).
What soon became apparent was the importance of HRM in any initiatives to promote
respect for the environment and other green priorities (Daily and Huang, 2001;
Govindarajulu and Daily, 2004; Guest, 1997; Paauwe and Boselie, 2005; Schuler and
Jackson, 2014). Eventually, GRHM came to be considered as simply using basic HRM
activities (i.e., recruitment, employee assessment, compensation, training, etc.) to achieve
specific environmental or green goals (Jabbour et al., 2010), with Jabbour (2013, p.147)
defining GHRM as being “concerned with the systematic, planned alignment of typical
human resource management practices with the organisation’s environmental goals”.
Employees must be motivated, empowered and environmentally conscious in order for an
organisation to become green (Callenbach et al., 2000). It is the proper use and
implementation of HRM that is seen as being critical to the efficient functioning of any
environmental management policy or system (Daily et al., 2011; Daily and Huang, 2001;
Jabbour and Santos, 2008; Jabbour et al., 2010; Kitazawa and Sarkis, 2000).
At the foundation of any successful green initiative would be corporate culture
(Branzei et al., 2004; del Brío et al., 2007; Marshall et al., 2005; Siebenhüner and Arnold,
2007). A sincere and dedicated respect for the environment must be present at all levels
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of an organisation, but especially with senior management (Govindarajulu and Daily,
2004). GHRM policies and initiatives have been shown to be integral to creating an
overall greener corporate culture (Gupta and Kumar, 2013; Jabbour and Santos, 2008).
Furthermore, it has been shown that reorganising and empowering workers, so as to
better align them with environmental objectives, can result in a greener organisation, with
autonomous and dynamic employees (sometimes working in teams) having been found to
be effective at arriving at solutions to complex environmental challenges (Daily and
Huang, 2001; Daily et al., 2012; Jabbour et al., 2013).
Another important element of GHRM is the efficient design and implementation of
employee training program. In-house training as it relates to green issues has become
fairly widespread (Renwick et al., 2013). Proper instruction can directly affect an
employee’s ability to identify, understand and implement best practices in terms of
environmental management (Daily et al., 2012; Sarkis et al., 2010), as well as provide
them with new technical and managerial skills that will help promote green initiatives
(Hart, 2005; Perez-Sanchez et al., 2003). Good training program have also been found to
improve employees’ opinions and motivations with regard to environmentally
responsible initiatives (Fernández et al., 2003), as well as promote the development of a
green corporate culture (Clarke, 2006). Also, effective GHRM can be used to highlight
the importance of responsible behaviour and the achievement of green objectives through
a well-designed employee evaluation and compensation process (Calia et al., 2009;
Jabbour and Santos, 2008). Clear green performance criteria and metrics should be
established by a firm so as to provide guidelines for expected employee behaviour
(Jackson et al., 2011). This would have the added benefit of reinforcing a green
organisational culture. Studies show that respect for the environment was associated with
higher levels of CEO pay, as well as tying a CEO’s compensation package to the
establishment of long-term green goals (Berrone and Gomez-Mejia, 2009; Cordeiro and
Sarkis, 2008). However, it should be noted that poorly designed incentive program may
actually hinder green efforts as employees might be reluctant to report problems out of
fear of retribution (del Brío et al., 2007). Also, primarily at the CEO level, there is always
the risk of abuse through accounting fraud or some other means that ensure that certain
performance goals will be met to the detriment of other stakeholders (Benz and Frey,
2007; Denis et al., 2006). The challenge associated with financial incentives would be the
development of precise and objective criteria to measure desired green performance, as
well as providing rewards that sufficiently motivate and penalties that do not overly
demotivate (Fernández et al., 2003; Jackson et al., 2011).
The field of GHRM could be considered as still being in its infancy (Jabbour, 2013;
Jackson et al., 2011; Renwick et al., 2016), as well as somewhat esoteric and lacking in a
practical framework that can be generalised and readily applied (Daily and Huang, 2001;
Govindarajulu and Daily, 2004; Renwick et al., 2013). That said, evidence exists showing
that companies that invest in GHRM are considered as being more desirable to work for
than companies that choose not to (Golds, 2011; Phillips, 2007; Stringer, 2010), and that
employees who are actively engaged in green initiatives are less likely to quit (Benn
et al., 2015). Some companies have even gone so far as to take a candidate’s green
attitude into account during the selection process (Ones and Dilchert, 2013). Furthermore,
similar to findings in the study of GP, a correlation has been found to exist between the
use of GHRM practices and positive environmental outcomes for companies that use
them (Daily et al., 2012).
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2.2 Defining the green social enterprise
Social enterprises are defined as those that do not place the market at the core, but rather
the welfare of the people participating in them (Granados et al., 2011). This loose
definition encompasses a wide range of organisations from charities which have trading
arms to commercial organisations which engage in charitable activities. Furthermore,
there exist many hybrid forms of social enterprises actively using and promoting
sustainable managerial goals and practices (Epstein and Buhovac, 2014).
One can find examples of entrepreneurs trying to achieve sustainable business
practices as far back as the 19th century (Anderson, 2000). In general, the early literature
on sustainable entrepreneurship was more concerned with issues of conservation and the
environment (Staber, 1997; Keogh and Polonsky, 1998; Pastakia, 1998; Linnanen, 2002;
Schaltegger, 2002; Walley and Taylor, 2002; Lehmann et al., 2005; Schaper, 2012). The
phrase ‘SD’ is credited with being used for the first time at the UN Conference on the
Human Environment in 1972 (Hall et al., 2010). But there are two major reference points
that are recognised as vital in the evolution of sustainability, resulting in it being seen as
something that can lead to behaviours that address environmental as well as social
problems. One was the Brundtland commission, created by the UN in the early 1980s
(WCED, 1987), with the other being the Earth Summit in Rio in 1992. These events were
key in the promotion of the importance of SD. Defined as “development to meet the
needs of current generations without compromising the ability of future generations to
meet their own needs” [WCED, (1987), p.54], the concept of SD forces organisations to
endorse moral responsibilities that go far beyond their previous notion of ‘business’ and
which now forces them to take more into account their social and environmental impacts
(Pasquero, 2007). The International Standard Organization (ISO) brought further clarity,
and emphasis, to sustainable behaviour by defining it as the “responsibility of an
organisation for the impacts of its decisions and activities on society and the environment
through transparent and ethical behaviour that: contributes to SD including health and the
welfare of society; takes into account the expectations of stakeholders; is in compliance
with applicable law and consistent with international norms of behaviour, and is
integrated throughout organisation and practiced in its relationships (activities include
products, services and processes; relationships refer to an organisation’s activities within
its sphere of influence)” (ISO 26000 in AFNOR, 2010). As pointed out by De Lange et
al. (2012), a sustainable organisation must consider its performance in a long-term and
holistic nature, integrating the three fundamental pillars of SD – the economy, social
equity and ecological preservation – in order to meet the needs of its current and future
stakeholders. Organisational sustainability is considered as “the result of the activities of
an organisation voluntarily or governed by law, that demonstrate the ability of the
organisation to maintain viable its business operations (including financial viability as
appropriate), whilst not negatively impacting any social or ecological systems” [Smith,
(2012), p.5].
In order to understand the phenomenon of environmentally-motivated social
enterprises, there is a need to focus on the normal practices of firms and, in particular, the
environmental value that they create, as well as their contribution to communities and
individuals (Korsgaard and Anderson, 2011). The creation of environmental value can be
seen as a redress to the increasing marketisation of nature (Polyani, 1944). A number of
Recycling waste and upcycling people
277
case studies attest to the ‘neoliberalisation of nature’, in other words, the perception of
nature as a source of accumulation or as an object of governance (Castree, 2008; Duffy,
2013). Some researchers see the negative environmental externalities produced by
markets as opportunities for social entrepreneurs (Dean and McMullan, 2007), while
others view profitability and SD as two incompatible and opposing ideas (De Clercq and
Voronov, 2011).
Smith (2012) argues that the characteristics of social economy organisations allow for
the meeting of social needs fulfilled neither by the state nor for-profit enterprises.
Moreover, social enterprises are deemed to be better suited for promoting ‘green
citizenship’ than the dominant form of capitalist ventures where profit motives override
environmental ones. Rather than the economic output of social enterprises in terms of
goods and services, it is “their purposes and the way they organise and manage their
productive activity” that define whether or not they belong to the “economie sociale
sector” [Molloy et al., (1999), p.8)].
Since the 1960s, the green social economy (GSE) has been focused upon an
ecologically modernised system of economic exchange within existing and mostly
neo-liberal institutions (Carson, 1962; Hardin, 1968; Pearce, 1988). GSE has setup
environmental-friendly norms and specifications within the market economy. In other
words, it is primarily related to production or distribution channels, concerning it self
with values that are not exclusively monetary in nature, but still striving to make a profit
and achieve economic growth. Recently, a new version of ‘cultural green economy’
(Berndt and Boeckler, 2009, 2011; Barr, 2014) has shifted focus towards the role of
social relations and the need to construct market forms other than the neo-liberal ones for
encouraging a truly sustainable green economy.
Vickers and Lyon (2014) introduced a typology of three distinct approaches
explaining alternative ways of enhancing the social and environmental values of ESEs.
They were defined as ‘small and beautiful’, ‘green knowledge economy’ and ‘green
collar economy’. Although Vickers and Lyon (2014) do not propose a model per se, they
explore the capabilities needed to realise various conceptions of strategies enabling the
scaling-up of ESEs and increasing their impact on specific markets (see Table 1).
Table 1
Typology of ESEs strategies
Small and beautiful
Capabilities
Green activists able to engage and manage volunteers; supportive activists and
volunteers; other social economy organisations and networks
Market
Local/regional ethical consumer market
Green knowledge economy
Capabilities
Highly qualified experts and enthusiasts in partnership or cooperative structures
Market
Knowledge-intensive for public (government, universities), private (B2B, B2C)
and third sector (social enterprises)
Green collar army
Capabilities
Diversified teams with strong set of business skills capable to manage
beneficiaries with limited empowerment and ‘hard to help’
Market
Public quasi-market (e.g., welfare-to-work programs)
Source: Vickers and Lyon (2014)
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The present study endeavours to contribute to the research stream on cultural green
economy and socio-technical systems’ innovations that generate fundamental changes to
patterns of harnessing renewable resources in a socially responsible way (Bessant and
Tidd, 2007).
Research into GSE considers that environmental and social sciences should not just
contribute to the mitigation of the impact that a neo-liberal society and economy has on
the environment. Rather, it should contribute to shaping ideas as to what type of truly
sustainable society and economy concerned individuals would like to create for this and
future generations (Burritt et al., 2002; Upward and Jones, 2016) within the critical
boundary areas that will preserve conditions for humans to thrive as defined by
Rockström et al. (2009) in the planetary boundaries approach to corporate social
responsibility (CSR).
Schaltegger and Wagner (2006) claim that an enterprise cannot be considered as a
successful sustainable business if it does not incorporate sustainability metrics into
accounting practices and/or managerial decisions. Important efforts have been lately
made to establish generally accepted set of sustainability accounting measures such as the
Global Initiative for Sustainability Ratings (GISR). GISR’s vision is to “transform the
definition of corporate value in the 21st century such that markets reward the
preservation and enhancement of all forms of capital – human, intellectual, natural, social
and financial” (GISR, 2016).
Vickers and Lyon (2014, p.455) found that all identified types of ESEs “demonstrated
elements of scaling-up and growth”. We argue that these types represent ‘weak
sustainability’ as their business philosophy is built upon the idea that manufactured
capital is equal to natural capital and can replace it. We argue that there exists at least one
other type of ESEs that has not been proposed by Vickers and Lyon (2014) that is
‘strongly sustainable’. It will be demonstrated that this type of ESE is not primarily
motivated by economic growth or geographic expansion, considering that natural capital
is of a higher value than the manufactured type and that the latter cannot fully substitute
the former (Daly et al., 1969). We shall contextualise this new type of ESE in terms of
internal social norms and managerial practices in relation to external formal regulations.
3
‘La Feuille d’Erable’
FE is a socially responsible enterprise that was founded in 1983 and is located in the
Brittany region of France, in the north-western part of the country. Its main activity has
been the recovery and recycling of paper and cardboard. ‘Let us recycle to preserve
humankind and its environment’ is the company’s leitmotif, clearly in line with the
conceptual framework of CSR offered by Carroll (1979). Its mission is “to develop an
urban ecology and to promote a social integration of the long-term unemployed and the
socially disadvantaged by using economic leverage” (La Charte de La Feuille d’Erable,
2009).
FE was created thanks to the dedication of a handful of environmental activists who
started out by recycling paper from a non-profit book store. In the beginning, the
organisation was a workers’ cooperative primarily comprised of people whose sole goal
was environmental protection. Originally, the members would go ‘door to door’
collecting paper waste, but it was soon realised that this would not be practical. In 1990,
FE began collecting waste and recyclables in the city of Rennes on the basis of an
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agreement it had with local elected officials and the national agency for waste recovery
(ADEME, formerly ANRED).
In 1993, FE specialised even further, expanding into the collection and recycling of
waste from companies and government agencies in the greater Rennes area. In 2009, FE
won a business tender for the collection of waste in the Rennes metropolitan area for a
period of six years. The social aspect of FE’s recycling, in which efforts would be made
to work towards reintegrating people who had been previously excluded from the
community, took shape in the 1990s when the company was contracted by the French
government to help reintegrate at-risk individuals.
FE was chosen for this case study because of its strong sustainable business practices
and its unique profoundly humanist SRHRM approach that extends the typology of
environmentally-oriented enterprises. FE has been considered a successful
environmentally-oriented social enterprise by various stakeholder groups, such as
regional and departmental institutions, members of the waste recycling companies’ guild,
customers and media. It was awarded the ‘Oscar of Sustainable Development’ prize in
the French Département (county) of Ille-et-Vilaine, of which Rennes is the capital city, in
2014. It will be hereby demonstrated that FE “eliminates the organisation’s contribution
to society’s violation of the sustainability principles; AND within the constraints of the
sustainability principles, the organisation’s vision and goals” [Robert et al., (2012), p.49].
Furthermore, a presentation will be made of FE’s sustainable business model factors
which differ from the ones previously identified by Vickers and Lyon (2014) and that
allow FE to create value and engender success.
4
Research methodology
There has been an ongoing call for further longitudinal work inside ESEs as well as
within a wider institutional and economic context (Davies and Mullin, 2011; Hynes,
2009; Vickers and Lyon, 2014; Upward and Jones, 2016). The present paper is an attempt
to address this lack of longitudinal work as the data used in this study spans almost a
decade, going from 2008 to 2016. This research employs qualitative case study research
methods (Eisenhardt, 1989; Stake, 2005; Flyvbjerg, 2006; Eisenhardt and Graebner,
2007; Yin, 2014). Case studies provide the ability to examine a topic in depth, which can
result in a richness of description and unintended insights. They can also lead to the
development of theory and allow “the much more meaningful question of why, rather
than just what and how, to be answered with a relatively full understanding of the nature
and complexity of the complete phenomenon” [Meredith, (1998), p.444].
A series of ten semi-structured interviews with decision-makers and managers at ‘FE’
were carried out. The number of interviews conducted reflects an attempt on the part of
the present authors to reach a state of ‘saturation’, i.e., that the chances of new data or
relevant themes emerging are minimal. Previous research has indicated that this state is
generally achieved after seven interviews (Guest et al., 2006). The basic thematic
elements arrived at in the present study all emerged within the first five interviews, with
additional interviews serving to provide richness of examples. Glaser (2001) makes the
point that saturation is linked to a notion of conceptual density. Therefore sample size
may be small but the key criteria for testing validity are whether the categories have been
filled and not whether enough interviews have been carried out. In this case, the ten
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interviews allowed the research question and linked categories to be fully explored and
expanded from multiple perspectives.
Past research has found semi-structured interviews to be ideally suited for registering
the changes that would take place over time with respect to the accepted customs and
behaviours of an organisation (Flyvbjerg, 2004). All interviews lasted between 40 and
60 minutes, and were digitally recorded and transcribed. The transcripts were analysed
and coded using a grounded theory approach (Charmaz, 2006; Charmaz and Belgrave,
2012).
The interviews, after being recorded and transcribed, were summarised and sent back
to the interviewees to be checked for accuracy. Further data were provided by the HRM
manager and the operations manager upon request by e-mail. Interpretations of primary
and secondary data by the researchers were conducted in order to validate the research
and draw lessons in an iterative analytical process (Yin, 2003).
In an effort to complement the data that was collected (in the form of copies of
internal and external communication, reports from meetings, dashboard indicators, etc.),
and in order to carry out triangulation, inter-rater reliability was ensured by having all
three authors carrying out analysis on the same material (Stake, 2005).
Yin encourages researchers to aim towards analytic generalisations and argues that:
“findings from a single case study nevertheless can be generalised to a broad variety of
other situations” [Yin, (2014), p.42]. The generalisability of the findings of this research,
which focuses on a green social enterprise in a specific sector and in a specific region, to
the wider area of social enterprises, is, of course, an important question. The focus of any
qualitative research will be limited by constraints, but this should not distract from the
possible generalisable insights and replicable best practices that it may be able to
contribute (Halinen and Törnroos, 2005).
5
Strongly sustainable type of environmentally-oriented enterprise
Recent studies on sustainable business models have come up with various, more or less,
exhaustive performance indicators (Bocken et al., 2014; Boons and Lüdeke-Freund,
2013; Schaltegger et al., 2012, 2016; Rauter et al., 2015; Wells, 2013). None of these
studies was conducted in the specific area of environmentally-oriented enterprises. We
hereby propose to carry out, to the best of our knowledge, the first such analysis by
conducting a case study of FE’s value creating content, governance structure and
transaction mechanisms. The study is based upon the following four business model
constituting elements that reinforce sustainability [Boons and Lüdeke-Freund, (2013),
p.13]:
1
the value proposition provides measurable ecological and/or social value in concert
with economic value
2
the supply chain involves suppliers who take responsibility towards their own as well
as the focal company’s stakeholders
3
the customer interface motivates customers to take responsibility for their
consumption as well as for the focal company’s stakeholders
281
Recycling waste and upcycling people
4
the financial model reflects an appropriate distribution of economic costs and
benefits among actors involved in the business model and accounts for the
company’s ecological and social impacts.
The constituting elements of FE’s business model that support rigorous sustainability are
summarised in Table 2.
Table 2
Constituent elements of FE’s rigorous sustainable business
The value proposition
The entrepreneurial human-centred vision of
FE is based upon the embedded value
proposition that everyone is employable and
that waste can be turned into a resource in
several recycling or up-cycling virtuous circles
(e.g., timber fiber used in paper can be recycled
up to five times).
The customer interface
FE provides its customers with
training in in-situ waste preservation and
sorting that enables and increases their
environmental responsibility. It also provides
learning-by-doing environmental education at
schools.
The supply chain
FE holds a leader position in the office
supplies recycling supply chain.
Furthermore, FE gives priority to recycling
the material via channels that are the most
efficient logistically.
The financial model
FE’s financial model is based on the
promotion of a “humanist economy in which
profit is not an end but a means to increase
the success of La Feuille d’Erable’s
mission”, preserving the financial health of
the company with entrepreneurial spirit, and
continuously improving and measuring La
Feuille d’Erable’s service performance.
Next, each dimension is analysed and presented in further detail.
5.1 The double social and environmental value proposition
The company has a very strong social grounding in that it proposes fixed-term
employment contracts (‘Le contrat à durée déterminée d’insertion’ in French) to
unemployed people who face particular social and/or professional difficulties such as
former prisoners, long-term unemployed people, etc. It encourages the employees’
participation in the decision-making and co-builds with each fixed-term contract (FTC)
employee their integration project, contributing to the recognition of the skills acquired
through the delivery of a certificate of competences at the end of the FTC contract, and
enabling access of FTC holders to sustainable employment through local partnerships. A
robust follow-up process has been put in place that allows FE to monitor the professional
track of their FTC employees from their recruitment until six months after they have left
the company. The management of FE has setup three periods in the FTC contract, each
focused on a different professionalisation aspect. The first one is aimed at evaluating the
FTC candidate’s capacity to fit into the company’s overall culture and mode of operation.
The second one highlights the individual’s particular social problems such as inadequate
housing, unstable marital situation, debt problems or criminal convictions. The third
period prepares the individual for when their FTC status ends and includes two telephone
contacts, three and six months respectively, after the individual has left the company.
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I. Descubes et al.
The number of FTCs has grown steadily since 2008, and there were 40 people under
FTC contract in 2016. The average length of a FTC contract at FE has increased by
approximately a month since 2008, standing at 14.5 months in 2016. The FTC is signed
for a minimum period of four months and is renewable up to a total duration of two years.
The above stated work contracts specify agreed upon conduct in terms of absenteeism,
misconduct towards colleagues, clients and management and alcohol or drug
consumption. According to the management these strict rules, which are understood by
all and applied rigorously, are one of keys to a well-functioning collective effort. It has
been the experience of the General Manager of FE that FTC employees appreciate when
the rules are applied to all with no exceptions. Furthermore, the greatest benefit to the ‘at
risk’ employees appears to be the recognition of their skills rather than feelings of pity for
them because of their social difficulties.
The FTC employees have the possibility to voice their concerns and make
suggestions for improvements in company procedures or propose innovations during
regular meetings called ‘Exprim’Café’. What is interesting about this procedure is its
empowerment effect on FTC employees, as they are held responsible for the
implementation of the measures that they have proposed. For example, in March 2016 it
was proposed that FE provide FTC employees a multimedia centre with books and DVDs
with resources useful for their professional growth, e.g., traffic rule manuals for truck
drivers or textbooks for the preparation of competitive exams for positions such as fire
fighter, prison guard or delivery person. One permanent employee and the FTC employee
who made the proposal were designated as implementation team responsible for the
realisation of the project. In this case, the multimedia centre started operating in May
2016.
Since 2015, the company has held the AFAQ EI/ETTI certification for its FTC
management procedures. One of the interesting visual tools used by the management is
the displaying of quality indicators at the entrances of the company’s facilities. An
example of the indicators used would be the level of absenteeism or the number, the trend
and the annual average of customer complaints.
FE tracks the professional evolution of FTC employees once they have left the
company and differentiates between four potential exit paths: sustainable employment
(temporary job contract for a period longer than six months or permanent job contract),
transitional employment (temporary job contract for a period shorter that six months),
positive outflow (an additional training period to increase the level of competence and
employability) and ‘cancelled out’ due to specific circumstances such as a prolonged
sickness period, instability or dissatisfaction with abandoned job positions. The
sustainable, transitional and positive paths are gathered under a single heading called
‘dynamic’ exits and are audited by the departmental council for integration through
economic activity (French acronym CDIAE). The required dynamic exit rate is 60% (and
is comprised of sustainable employment, transitional employment and positive outflows).
At FE, the dynamic exit rate has steadily grown from below 50% between 2008 and
2014, to 54% in 2014, 71% in 2015 and 85% in 2016.
The most important environmental element of the FE’s value proposition is found in
the deliberate and voluntary geographical limitation of the area where waste material is
collected, recycled and/or upcycled. Although the company could increase its revenues
by selling the collected material to major (mostly Chinese) players in the waste market, it
carries out its operations in a geographically limited area in order to preserve and, if
Recycling waste and upcycling people
283
possible, even create more ‘non-offshorable’ jobs and to lessen their carbon and water
footprints.
5.2 The supply chain
This Rennes based company operates in a highly competitive industrial environment,
mainly due to pressure from Asian recycling companies that are able to offer higher
prices to collectors of waste paper. But the environmental footprint of paper recycled by
Asian competitors is much higher than when it is recycled in a closed loop. FE insists that
collected recyclable material is never sent to a paper mill more than 430 kilometres from
the Rennes metropolitan area where it was collected and sorted by quality. For example,
mixed colour paper or newspapers and magazines are recycled at a plant near Rouen in
Normandy, while white or blank paper is processed at another mill near Le Mans (see
Figure 1).
Figure 1
Paper mills collaborating with FE (see online version for colours)
FE is competing against mainly Asian for-profit paper producers not only to remain
competitive price wise, but also to establish a recycling system and routes that provide
the lowest possible carbon footprint. In 2014, FE equipped its fleet of trucks with a GPS
system that allows the operators to optimise their routes.
In 2013, FE launched a new recycling program called ‘Adalia’, specialised in
collecting and recycling various office supplies such as fluorescent tubes and bulbs,
electrical disposable batteries, print cartridges abd toners, soft and hard plastic covers and
containers and plastic cups. Again, the inherent motivation for launching ‘Adalia’ was the
increased efficiency of the collecting process measured in tones per kilometre and
turnover per kilometre.
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I. Descubes et al.
5.3 The customer interface
Customers are asked to take an active part in sorting paper by quality, e.g., white, mixed
colour, newspaper, etc. They are provided with one-day training and inventive cardboard
boxes called ‘tri-kest’ that facilitate the sorting process (see Figure 2).
Figure 2
Tri-kest 100% recyclable cardboard boxes (see online version for colours)
An on-board truck weighing system enhances the transparency and trust between the
operators and the customers as at the end of each collection both parties co-sign an
electronic receipt certifying the quality and the quantity of the picked-up material.
The reduced carbon and water footprint resulting from the recycling of paper and
cardboard is translated into easy to understand equivilents in the CSR reporting that all
FE’s customers have been receiving since 2011. The company has worked out a unique
system of reporting that customers can easily understand as it ‘translates’ the material
savings into daily-life environment-impacting phenomena such as showering, driving,
taking a high-speed train between Rennes and Paris or the personal consumption of
energy. Furthermore, each report contains information regarding the amount of work that
was created by the customer due to their collaboration with FE (see Figure 3).
FE also accompanies its customers by proposing to them regular diagnostics of their
internal and external waste management according to the ever-evolving legislative
requirements. It provides a grid that allows for understanding the existing recycling
solutions’ carbon and water footprint as well as the level of awareness of the employees
regarding recycling activities and environmentally responsible behaviour. Based on this
diagnostics, FE proposes to its customers coaching and corrective actions.
The company’s management considers that to be truly sustainable, the company
should rather educate its customers and prospects to enlarge the variety of collected and
re-purchased recyclable and reusable material within a limited geographical area. Thus,
since 2010 the company has collected and recycled the FSC poplar lumber from wooden
crates left behind by merchants at the end of the daily open-air markets in the Rennes
metropolitan area. The wooden crates are dismantled, crushed and the obtained wooden
chips are soaked in paraffin to become ecological fire lighters (see Figure 4). The amount
of collected material is approximately 100 tons of wood per year and provides jobs to
three long-term unemployed mildly mentally disadvantaged workers who are members of
a local partner not-for-profit organisation called ‘agir’.
Recycling waste and upcycling people
Figure 3
285
Example of the CSR reporting for a regional middle-sized company (see online version
for colours)
Yet, another example of proactive and long-term orientated customer interfacing is the
company’s waste management education program that it provides in kindergartens,
elementary and high schools in the Rennes metropolitan area. Children and adolescents
(the consumers of tomorrow) are provided with learning-by-doing training that is
differentiated by age category, such as recycled paper crafting, vermicomposting,
participation in the EU Comenius program specialised in recycling, etc. (see an example
in Figure 5).
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I. Descubes et al.
Figure 4
Ecological and socially inclusive fire lighters (see online version for colours)
Figure 5
Recycled paper crafting at a kindergarten (see online version for colours)
Recycling waste and upcycling people
287
5.4 The financial model
As previously stated, the financial model of FE is based on the promotion of a “humanist
economy in which profit is not an end but a means to increase the success of FE’s
mission”, preserving the financial health of the company with entrepreneurial spirit, and
continuously improving and measuring FE’s service performance.
Therefore, the company is not measuring only its profit (that has actually grown from
700,000€ in 2008 to 1.8 million € in 2016) but includes in its ‘eco-global’ balanced
scorecard the collected material tonnage per kilometer, per type and per FTC employee.
6
SRHRM: beyond recycling material and towards upcycling people
SRHRM is omnipresent at FE in that it can be found in the daily routine that has been
adapted for the previously socially excluded workers. The FTC employees fully
understand the challenges of the multi-faceted and competitive business environment
they are involved in and are proud of the fact that 90% of the paper collected is
consistently recycled. The practice of management at FE, just as in a conventional
enterprise, is based on formal rules comprised of specific written procedures covering a
whole host of items (established work hours, lateness and absences, hygiene, safety,
discipline, etc.). But it is also based on the ability of managers to perceive the subjective
and individual past experiences of employees and their capacity to grow professionally.
Instead of deploying extrinsic motivation tools, management prefers methods of intrinsic
motivation that encourage self-reliance, so that both the full-time and FTC employees are
self-motivated. It starts with their (re) learned autonomy, and the company helps them to
use the natural potential that already exists in them. The next step is to encourage workers
and support them with a vision that says every individual is naturally inclined to act
positively, to explore his or her own environment, to create and to learn without the need
for conditioning. And finally, to create the context in which people will get motivated by
themselves.
At FE, managers spend about 80% of their time managing and about 20% developing
people and giving advice. This could be likened to the Anglo-Saxon concept of
‘management by walking around’. Management strives as much as possible to get all
employees, both permanent and temporary, to first understand both the immediate and
long-term strategic issues involved, and then decide collegially and collectively to make
decisions and implement them. In other words, the management tries to follow the
formula attributed to Benjamin Franklin: “tell me and I forget, teach me and I may
remember, involve me and I learn” (Pankey and Davis, 1985). Employees are encouraged
to find solutions to problems themselves by making them more involved in the
company’s operations. The management applies a five-step approach, which is to say; it
specifies the expected results, gives guidelines, identifies the resources needed, defines
how results will be evaluated, and determines the consequences of failure or success.
Then it applies the principle of positive stimulation, namely, giving recognition for effort
and positive results first and not spending time criticising what is wrong.
288
7
I. Descubes et al.
Conclusions
An in-depth case study analysis was carried out at FE along four axes in terms of the
company’s core activities as they relate to the creation of measurable ecological and/or
social value, i.e., FE’s
1
value proposition
2
supply chain
3
customer interface(s)
4
financial model.
After analysing FE’s internal and external operations, elements were identified that
contributed to the successful achievement of the dual objectives of GP and the social
inclusion of previously disadvantaged social groups: in other words elements that
reinforce sustainability.
The findings of this case would also shed light on specific features of yet another type
of ESE that does not aim solely for ‘high economic/financial growth beyond a regional
base to multiple sites’ nor is it ‘dependent on public quasi-markets’ (Vickers and Lyons,
2014). We hereby propose that FE does not belong to any of the environmentallymotivated social enterprise types proposed by Vickers and Lyons (2014) due to its
strongly sustainable business model that could be labelled as ‘empowering and
optimising’. Neither does FE fit into one of the sustainable business model archetypes as
defined by Bocken et al. (2014), because of its main value proposition of SRHRM, which
these archetypes do not include. Indeed the unique advantage of FE and the original
contribution of this case study is the combination of the four elements of a sustainable
business model (Boons and Lüdeke-Freund, 2013) and in particular the empowerment of
socially disadvantaged employees. As a result, there are indications that a business model
is more than just a ‘market device’ that simply acts as an intermediary between various
stakeholders (Doganova and Eyquem-Renault, 2009; Muniesa et al., 2007).
This research project suggests that for organisations to be sustainable, both social and
environmental priorities need to be taken into account and would include environmental
stewardship, respect for persons and nature, and social equity (Stubbs and Cocklin,
2008). This multidimensional approach with regard to concern for society, the
environment and equality can be considered as the determining factor that results in FE’s
business model and internal structure being referred to as ‘sustainable’ (Dyllick and
Hockerts, 2002; Schaltegger and Wagner, 2006; Stead and Stead, 2008). It can be argued
that this additional typology, in the context of environmentally-motivated social
enterprises, can provide a helpful framework for extended study into the identification of
key success factors for promoting sustainability in terms of creating social and economic
value.
Furthermore, this case study shows that a motivational system based on intrinsic
bottom-up empowerment rather than one that uses an extrinsic set of carrots (rewards)
and sticks (punishments) better reflects the social objectives of ESEs, namely, a
long-term social utility that every social entrepreneur seeks to achieve, while at the same
time focusing on creating real “customer and social value by integrating social,
environmental, and business activities” [Schaltegger et al., (2012), p.112]. Promisingly,
there also appears to be an absence of the trade-offs often found in sustainable business
Recycling waste and upcycling people
289
models, i.e., increased environmental performance but with an associated increase in
operating cost or reduced efficiency (Boons and Lüdeke-Freund, 2013; Charter et al.,
2008). Observations from this case study provide evidence that applying intrinsic
motivators in environmentally-motivated social enterprises generates better results (e.g.,
the number of dynamic exits reaching 85% in 2016). The importance of effective
management, in conjunction with the proper use of efficient management tools, with
regard to ensuring the viability of a sustainable enterprise, is fairly well-known (Birkin
et al., 2009a, 2009b), but would be reinforced by the findings of the present study. We
suggest that a system of management and governance that encourages an individual to
use their potential to the best of their ability leads naturally to an increase in the
performance of the organisation and maintains (as well as sustains) the creative force of
people operating in the third sector in a social and communal sense.
A future avenue of research could quite possibly be a study in which the SRHRM
methods of FE are instituted in another commercial or industrial context, including the
for-profit sector. It might also be of value to extend the proposed sustainable business
model of ‘empowering and optimising’ to include other stakeholder groups. Another area
of interest might be a cross cultural study in which the SRHRM tactics and practices of
FE are applied in another country, with results being analysed.
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